AWR – Agency Workers Regulations

In a nutshell AWR is being introduced to protect temporary workers by ensuring that they have equal pay and working conditions comparable to permanent employees

From 1st October 2011 agency workers who operate via an Umbrella model or are employed on a PAYE basis will have enhanced rights to equal pay (including overtime and bonus), working time, and holidays as well as to access to facilities at the hirer site.

From the first day of an assignment the agency worker will acquire rights to facilities, including the right to be told of suitable job vacancies.

Other rights apply after a qualifying period of 12 weeks including entitlement to equal pay, rest breaks, working time and holidays. The agency worker is entitled to those rights that either regular employees or workers of the hirer are entitled to.

The qualifying clock will be suspended where there is a break of less than 6 weeks. It will be stopped entirely and reset if there is a break of 6 weeks or more in most circumstances.

Therefore even if assignments are short if they are regularly repeated they will count towards the 12 weeks period unless there is a six week break period.

A new qualifying clock will commence for each new role the agency worker undertakes at the same client. There are also anti-avoidance provisions to defeat structures designed to overcome the 12 week rule.

These general employment rights are against the umbrella company or staffing company rather than the hirer unless a Company has hired directly on a temporary basis.

In order to manage the impact of AWR, Purcon will ask hirers to confirm if the temporary worker was hired on a permanent basis what would be their:

• Salary including overtime and bonus if applicable) and holiday entitlement
• Contracted hours of work (to calculate equivalent hourly / daily rates)

These key questions will be asked for each temporary role regardless of how a contractor will operate.

If the interim role is unique and there is no comparable permanent post due to the skills not being available in the permanent staff, then no comparator pay or holiday information has to be provided.

It is the hirers responsibility to provide the correct information for each temporary role.

As most interim roles within the procurement sector tend to be equal or more likely above the rate of their permanent counterparts, in theory the AWR legislation will not have a great affect on the procurement temporary market.

Options to the standard temporary operating models, Personal Services Company (PSC or LTD Company), Umbrella Company or PAYE temp may also include 'The Pay Between Assignment model' (PBA) alternatively called 'The Swedish Derogation' model.

'The Swedish Derogation' model will allow temporary workers to forfeit the AWR comparative rights in return for 50% of their highest taxable pay in the last twelve weeks or during their last assignment (whatever is shorter) being paid between assignments or 'downtime' These payments must be transparent and unrestricted without any expenses being 'off set' against them or it will be seen as an AWR avoidance tactic resulting in liability for all parties involved. However, the Derogation only removes equal pay obligations and the other AWR rights continue to apply. Please be aware that until case law is established it will be unclear what a supposed "Derogation provider" must do to satisfy the Derogation

Personal Service Company Contractors or Ltd Company Contractors are not automatically out of scope for the AWR regulations; but as most PSC or Ltd Company Contractors operate outside of IR35 it seems unlikely they will bring a claim for fear of losing the IR35 status. In addition, PSC's tend to operate as an independent contractor of services rather than supervised staff, demonstrating another factor in determining operating outside of the IR35 regulations.

Purcon will be watching this space in the run up to New Year and beyond to see how case law will affect the UK's flexible workforce. We will continue to work closely with our Clients and Candidates to offer guidance, advice and ensure full compliance with the new regulations.

If you are have any questions or are interested in discussing further please contact Chris Boobier, Consultant - Interim Executive Resourcing team cboobier@purcon.co.uk